A detailed 150 page report for green vehicle strategy prepared after 14 industry expert interview,61 Electric car user interview and 54 potential car user interview. The first ever report in India.
2. Profiles of Presenters
• Gopalakrishnan D
– 8 years in Automotive industry (Maruti Suzuki)
– Customer relation and channel management
• Mukesh Sharma
– 11 Years in Automotive Industry (Maruti Suzuki/Suzuki Motor
Corp/Tata Motors)
– New Product development and Vehicle R&D
Indian Institute of Management , Bangalore
3. Contents
• Motivation behind the work
• Introduction
• Objective and scope
• Methodology
• Findings
• Discussions and Recommendations
Indian Institute of Management , Bangalore
4. Motivation behind the work
• Decreasing fuel increasing cost
• Emission norms getting tougher
• Mobility requirements getting denser
• Alternate fuel research going on
• To understand consumer behavior for new
sources of mobility
• Facilitate academicians and practitioners
Indian Institute of Management , Bangalore
6. Introduction
Indian Automobile sales 2008-09
•Fast growing Indian 25,00,000
automobile market 20,00,000
•Lesser carbon foot
Vehicle sales
15,00,000
print Total sales
10,00,000
•Least carbon foot print
5,00,000
for electric cars
0
•Oil conservation in 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
range of 50~100%
Indian Institute of Management , Bangalore
7. Objective and Scope
• Understanding Consumer insights
Consumer
• Segmentation , Targeting and
Marketing
Strategy
Positioning of green vehicles
• Blue print for promoting green vehicles
Overall
Strategy
in emerging markets like India.
Indian Institute of Management , Bangalore
8. Methodology
-Study conventional car market
-Green car evolution so far Conventional Industry Current
cars experts customers
-Literature study about green
marketing
-Understand World scenario
-Understand Indian scenario Green car World Focus
evolution ecosystem groups
-Interview industry experts
-Survey current electric car
customers
-Conduct focus groups for Literature Indian Potential
study scenario customers
potential customers
-Survey potential customers
Indian Institute of Management , Bangalore
9. Findings and Frameworks
• Psychology of green consumers
• History of electric cars
• HEV/EV programs in other countries
• Indian scenario and NHPP
• REVA customer(54) vs conventional customer(61) analysis
• Pros and cons framework (PNC)
• Focus group findings (1-8)
• Green vehicle ecosystem framework (GVE)
• Green customer perceived value framework(GCPV)
• Industry expert analysis framework(14) (IEA)
• Green vehicle diffusion model (GVDM)
Indian Institute of Management , Bangalore
10. Psychology of green consumers
S.No Type Characteristics
1 True blue greens (10%) People with strong environmental beliefs
Politically active
Contribute money to environmental groups
2 Greenbacks greens (5%) Their willingness to pay for green product is
22% and support environmental concerns
Busy in life , not politically active
3 Sprouts (33%) Willing to pay 4% extra
Willing to engage in environmental activities if it
consumes less time
After some time few of them migrate to true
blue and greenback greens
4 Grousers (15%) They feel saving environment is responsibility
of government
They recycle cans and bottles , but grudgingly
5 Basic browns (37%) Not convinced that environment problems are
that serious
They believe it’s a hype
Indian Institute of Management , Bangalore
12. HEV/EV programs in countries
• USA (California)
– ZEV/PZEV – Penalty based enforcement
– Lobbying by Oil companies/Auto companies
Active – Active -
• France Japan Consensual Impositional
– Denser city layout
– Gasoline – Higher taxes
– Nuclear power
– Public procurement approach France Reactive - Reactive -
California
Consensual Impositional
• Japan
– Earliest promoters (1970’s)
– Government + Companies+ Municipalities
– Development of quick charging stations
– R&D support
– Market support
• Israel
– Better place model ($2300 million invested)
– Oil independent by 2020
– 500,000 charging stations by 2011
– Battery swapping mechanisms
Indian Institute of Management , Bangalore
13. Indian scenario
• REVA NXG /NXR electric
• Toyota Prius hybrid
• Tata Indica electric
• GM Spark electric
• Maruti Suzuki Eeco electric, SX4 hybrid
• Hero electric
• Mahindra and Mahindra
• National Hybrid propulsion program(NHPP)
• Ashok Leyland ,Tata Motors ,Maruti Suzuki ,Bajaj Auto
Mahindra and Mahindra
Indian Institute of Management , Bangalore
14. REVA customer VS Conventional
customer survey analysis
Women ~
50% Men ~ 95%
First Value, Senior First Value,
then Eco- citizens ~ Middle
then
friendly 40% aged ~ 90%
Comfort
Reva Conventional
car userConfidential ( Non disclosure agreement ) user
car
Daily use Working profile Single
of Reva ~ profile couple ~
Daily use of
car ~ 95%
earner ~
95% 55% 70%
Self- Car for
Private firm
Own 2 cars Leisure
employed Trips ~ 60%
~ 55%
~ 70%
~ 20%
Reva dissatisfaction Reva NOT good purchase Why GREEN cars? Why not GREEN cars?
•Inadequate service •Less space/ too small (30%) •Environment friendliness •Expensive (71%)
network (37%) •Not value for money (30%) (69%) •Unproven technology (35%)
•Poor build quality (30%) •Less drive range per charge •Low running cost (54%) •Lower performance (18%)
•Battery charge problem Confidential(Non disclosure of drive (15%)
(22%) •Quality agreement) •Uncertain serviceability (12%)
(28%) •Unsafe (17%) •Derisk from petrol prices •Stability issues and poor
•High vehicle cost (24%) •Not really eco-friendly (17%) (8%) design (6%)
•Poor service quality (11%) •Less maintenance (8%)
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15. Pros and cons framework (PNC)
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16. Total cost of ownership comparison
Confidential ( Non disclosure agreement )
Indian Institute of Management , Bangalore
17. Total cost of ownership comparison
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23. Discussion and Recommendation
• Innovation wheel
• Technology VS affordability quadrant
• Segmentation , Target , Positioning
• Green strategy
– Lean Green
– Shaded Green
– Defensive Green
– Extreme Green
• Marketing Mix and challenges
• Future projections - India
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24. Innovation wheel &
Technology VS affordability
quadrant
More
Investment
More Better
Profits Technology
Higher More
Sales Demand
Lower
Costs
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25. Green strategy
Product Price Place Promotion
LEAN X
DEFENSIVE X X
SHADED X X X
EXTREME X X X X
Indian Institute of Management , Bangalore
26. Marketing Mix and challenges
•People: Education and awareness of people
•Politics: Lobbying with government for tax subsidy
•Process: GREEN alliances.
•Proactive planning: changing consumer tastes.
•Pace: implement the suggestions as fast as possible.
•Publicity: publicize both the makers and the users to
increase the diffusion rate of such an innovation.
Indian Institute of Management , Bangalore
27. 11 point Blue Print: Strategy for
promoting green automobiles
• Green alliance.
• Commitment of resources.
• Electric vehicle regulation.
• Infrastructure - charging points.
• Tax reliefs and Subsidy.
• Incentives to consumers to change their
driving and vehicle ownership behavior.
• Education and awareness - Schools and
colleges
Indian Institute of Management , Bangalore
28. 11 point Blue Print: Strategy for
promoting green automobiles
• Segmentation and Targeting of consumers for electric
vehicles
– Short term (10 years): Women and older people.
– Medium term (20 years): Increase consumer adoption rate .
– Long term (> 20 years): Develop mature ecosystem mass
adoption.
• Positioning of the product:
– In short term- “Value for money car”.
Confidential ( Non disclosure agreement )
– In medium term - “Value for money + eco friendly product”
– In long term - “Total eco friendly product”.
• Electric cars require electricity
– Centralized Nuclear power plant generation systems
– Decentralized (standalone) Solar electricity generation systems.
• To prove the technology for mass usage and change the
consumer behavior to use such products.
Indian Institute of Management , Bangalore
29. How will it eventually happen?
100
Willingness Capability
70
Chance that
next person
purchasing a Opportunity
car will be
conventional
0
0 70 100
% of people using conventional cars
Indian Institute of Management , Bangalore
30. Forecast
Confidential ( Non disclosure agreement )
Indian Institute of Management , Bangalore
31. Future scope of work
• Analysis of battery industry and its dynamics
• Analysis of future power generation systems
such as solar and nuclear means.
• Hypothesis development and testing.
• Article
• Book
Indian Institute of Management , Bangalore
32. Thank you for your patience
Indian Institute of Management , Bangalore